Correlation Between AGNC Investment and Capstead Mortgage
Can any of the company-specific risk be diversified away by investing in both AGNC Investment and Capstead Mortgage at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AGNC Investment and Capstead Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC Investment Corp and Capstead Mortgage, you can compare the effects of market volatilities on AGNC Investment and Capstead Mortgage and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AGNC Investment with a short position of Capstead Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC Investment and Capstead Mortgage.
Diversification Opportunities for AGNC Investment and Capstead Mortgage
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AGNC and Capstead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AGNC Investment Corp and Capstead Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstead Mortgage and AGNC Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AGNC Investment Corp are associated (or correlated) with Capstead Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstead Mortgage has no effect on the direction of AGNC Investment i.e., AGNC Investment and Capstead Mortgage go up and down completely randomly.
Pair Corralation between AGNC Investment and Capstead Mortgage
If you would invest 954.00 in AGNC Investment Corp on December 29, 2023 and sell it today you would earn a total of 25.00 from holding AGNC Investment Corp or generate 2.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
AGNC Investment Corp vs. Capstead Mortgage
Performance |
Timeline |
AGNC Investment Corp |
Capstead Mortgage |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
AGNC Investment and Capstead Mortgage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AGNC Investment and Capstead Mortgage
The main advantage of trading using opposite AGNC Investment and Capstead Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC Investment position performs unexpectedly, Capstead Mortgage can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capstead Mortgage will offset losses from the drop in Capstead Mortgage's long position.AGNC Investment vs. Visa Class A | AGNC Investment vs. Diamond Hill Investment | AGNC Investment vs. Nocturne Acquisition Corp | AGNC Investment vs. Mountain I Acquisition |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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